IN THE HIGH COURT AT CALCUTTA
DIPANKAR DATTA, PROTIK PRAKASH BANERJEE, JJ.
Nusrat Jahan Ruhi - Appellant
Versus
Shyam Steel Industries Ltd. & Ors - Respondent
A.S.T 62, 63 of 2018 with A.S.T.A 19, 20 of 2018, F.M.A.T. 1002, 1001, 1054, 1055, 1058 of 2018 with C.A.N. 8308, 8262, 8352 of 2018
Decided On : 12-10-2018
Specific Performance - Breach of Contract - Specific Relief Act, 1963, Section 42 - The court set aside the temporary injunction and its extensions, and dismissed the appeal, finding that the conduct of the respondent was not blameless and that the contract was not performed within the time stipulated. The court also found that the balance of convenience and inconvenience was against granting a temporary injunction. The court strongly deprecated the lower court's decision to make the injunction 'absolute' till the disposal of the appeal, and dismissed the appeal with costs.
Fact of the Case:
A steel manufacturer sued a celebrity, her management agency, and a competitor for specific performance of a contract dated August 7, 2017, and for permanent and mandatory injunctions to enforce a negative covenant in the contract. The plaintiff alleged breach on the part of the celebrity, induced by the rival, who was said to benefit from the breach.
Finding of the Court:
The court found that the conduct of the respondent was not blameless and that the contract was not performed within the time stipulated. The court also found that the balance of convenience and inconvenience was against granting a temporary injunction. The court strongly deprecated the lower court's decision to make the injunction 'absolute' till the disposal of the appeal, and dismissed the appeal with costs.
Issues: Breach of contract, specific performance, temporary injunction, balance of convenience, interpretation of contractual clauses, enforcement of negative covenant
Ratio Decidendi: The court declined to decide the questions of whether a contract of personal service is enforceable specifically, whether a negative covenant can be enforced in a suit, in restraint of trade or business, and whether the agreement could be held to be subsisting as on a certain date, as these are matters to be decided at the final adjudication of the suit. The court set aside the temporary injunction and its extensions, and dismissed the appeal, finding that the conduct of the respondent was not blameless and that the contract was not performed within the time stipulated. The court also found that the balance of convenience and inconvenience was against granting a temporary injunction. The court strongly deprecated the lower court's decision to make the injunction 'absolute' till the disposal of the appeal, and dismissed the appeal with costs.
JUDGMENT :
PROTIK PRAKASH BANERJEE, J.
1. A steel manufacturer sued a celebrity, her management agency and a competitor, for specific performance of a contract dated August 7, 2017 and also for permanent and mandatory injunctions, which would, among other things, have the effect of enforcing a negative covenant in the contract. The contract in question, very common in these days, envisaged that for a certain consideration, the celebrity would endorse or promote only the products of the plaintiff/steel manufacturer for the period during which the agreement would subsist and would not endorse or promote the products of any rival/competitor. The plaintiff alleged breach on the part of the celebrity, induced among others, by the rival, who was said to benefit from the breach.
2. The plaintiff sought interlocutory reliefs in its suit and an ex parte ad interim order of injunction was passed on September 15, 2018, by the learned Judge, VIth Bench, City Civil Court at Calcutta in Title Suit No.1215 of 2018 without prior service of any notice or copy of the petition on the defendants. The celebrity and the rival preferred two several appeals against this ex parte ad interim order, which were registered as AST Nos.62 and 63 of 2018 respectively. While this court was hearing the applications in connection with the appeals to consider the question of interim reliefs, the learned court below proceeded to extend the original ad interim order. Against the extension of the ad-interim orders, two further appeals being FMAT Nos.1001 and 1002 of 2018 were preferred by the celebrity and the rival, respectively. During its pendency, the rival had applied under order 39 Rule 4 of the Code of Civil Procedure. This court directed that the application for vacating the interim order taken out by the celebrity be treated as a written objection to the application for interlocutory reliefs in the court below and that such application be heard out alongwith the injunction application, in the meanwhile. The learned court below did so, and was pleased to make the original ad interim order, as extended, absolute till the disposal of the appeal being AST No.62 of 2018 and the connected application before this court, by an order dated October 3, 2018. This was further challenged by the celebrity and the said rival by way of FMAT 1054 and 1055 of 2018 respectively. In each of these appeals, the respondent no. 1 is the plaintiff. The plaintiff has also carried that part of the order dated October 3, 2018 aforesaid which directs the interim order to continue till the disposal of the appeal (AST No.62 of 2018) and the connected application by this court. This appeal, where the plaintiff is the appellant, has been registered as FMAT No.1058 of 2018. This court directed on October 12, 2018 that this last appeal at the instance of the plaintiff would be disposed of together with the said three appeals where the plaintiff was the respondent No. 1.
3. While hearing the parties on the application for stay, with the consent of the parties this court heard the parties on the merits of the appeals themselves, dispensing with all formalities, including notice since all parties who had appeared in the court below were represented by learned counsel.
4. The appellant celebrity has alleged based on the pleadings of the respondent no. 1 and the documents it had produced that it was the said respondent who was in breach of the contract and as a wrongdoer, it was disentitled to claim an equitable relief such as an injunction at the interlocutory stage. The appellant rival supports this contention in its independent appeals. The respondent no. 1 on the other hand alleges that the documents including digital evidence generated by the celebrity/appellant herself, show that she was in breach. To understand the rival contentions, a brief summary of the contractual terms of which the breach is complained, is to be noted.
5. The parties relied upon the following contractual clauses: -
“1. TERM
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